The moves come as regional emerging economies, including Indonesia, are hit hard by overseas investors fleeing on concerns that the US may soon wind down its huge stimulus program.

Jakarta’s main stock market fell almost 9 percent in the four days ending on Thursday, while the rupiah at one point fell below the psychologically important mark of 11,000 to the US dollar, its lowest since the middle of 2009.

Indonesia’s economic woes have been compounded by domestic problems, such as slowing growth, surging inflation and a widening current account deficit.

However, Indonesian ministers yesterday announced steps aimed at reducing the deficit and making investment easier in what is a notoriously difficult business climate.

“We are taking every step to deal with the impact of global turbulence,” Indonesian Finance Minister Chatib Basri told reporters in the capital, Jakarta.

“I have always said that bad times make good policies,” he said.

To reduce the deficit, the government will hike taxes for imports of some luxury goods, reduce oil and gas imports by increasing the use of biodiesel and boost exports with tax breaks for certain industries, he said.

Official data last week revealed that the current account deficit widened to US$9.8 billion in the second quarter, the biggest shortfall since the Asian financial crisis of the late 1990s.

To encourage foreign investment, authorities would speed up the processing of applications for projects in the agricultural and mineral sectors, Indonesian Coordinating Minister for Economic Affairs Hatta Rajasa said.

The plan did not impress investors, with the Jakarta benchmark index losing 0.1 percent immediately after the announcement, after rising 1.42 percent earlier in the day.

The index is down about 9 percent this week, while the rupiah is sitting just short of 11,000 to the US dollar, its lowest since the middle of 2009.

Indonesia’s woes are mirrored in India, where the rupee on Thursday sank to a record low 65.56 to the US dollar. However, the rupee rose 0.6 percent yesterday, with investors reassured by comments from Indian Finance Minister P. Chidambaram and the central bank, which lifted the currency off its historic lows, analysts said.

“There is a bit of steadiness in trade, volatility is lower,” said Param Sarma, chief executive with consultancy firm NSP Forex.

The finance minister’s “statements seem to have led to some calm. The rupee can’t just keep falling one way,” Sarma said.

The rupee has shed a fifth of its value this year, which the minister said was “undervalued and overshot the reasonable and appropriate level.”

Chidambaram also said there was no plan to resort to more capital controls and that reviving growth, which has slumped to a decade low of 5 percent in the year to March, would remain the focus of government.

Reserve Bank of India (RBI) Governor Duvvuri Subbarao on Thursday dismissed fears that the country was hurtling toward a balance of payments crisis similar to the one seen in 1991.

The RBI’s annual report for 2012-2013, released on Thursday, said India’s foreign exchange reserve, “although lower than in the pre-crisis period, is adequate to finance about seven months of imports.”